Comptroller finds $23M spent improperly on inmates in prison

TRENTON – New Jersey spent some $23 million between July 2009 and April 2011 providing unemployment benefits, Medicaid coverage and other financial assistance to more than 20,000 individuals who did not qualify for such government help because they were incarcerated at the time, State Comptroller Matt Boxer said in his latest report.

The audit released Wednesday found that state agencies in charge of public assistance programs failed to review county inmate data, and in some cases state prison data, before awarding government assistance.

One agency told the comptroller’s office it relied on a review of New Jersey newspapers to determine if any of its thousands of program participants had been arrested or convicted of a crime.

In addition to unemployment benefits and Medicaid coverage, inmates in county and state custody improperly received benefits from the Supplemental Nutrition Assistance Program (SNAP), which provides financial assistance to purchase groceries; Work First New Jersey, which provides temporary cash assistance and other support services; and the state pension program.

“These are vitally important social programs,” Boxer said in a statement. “Our audit identifies simple but critical steps that will help ensure that tax dollars spent on these programs are reserved for those who actually qualify for benefits.”

More than $10 million of the benefit payments identified by the audit derived from unemployment insurance benefits paid out to more than 7,600 incarcerated individuals, the report found.

State law provides that only individuals who are “able to work” and “available for work” are eligible for those benefits.

“Suffice it to say that when thousands of inmates are collecting unemployment checks from behind bars, there is a serious gap in program oversight,” Boxer said. “The good news is that as a result of our audit, changes are being made that will save millions of dollars for taxpayers.”

The Comptroller reported that it found that one individual received more than $39,000 in unemployment payments for well over a year while imprisoned for a drug-related offense. Another individual, convicted of unlawful possession of a firearm, began receiving unemployment payments only after he already had been in prison for three months. That individual received more than $25,000 in improper unemployment benefits over the course of one year, according to Boxer’s office.

During the course of the audit, the Comptroller also found a series of instances where state employees were incarcerated and used sick leave during their term of incarceration, a violation of state regulations. The office has provided the names of those individuals to each of the responsible state agencies so that they may recover the payroll funds in question.

In total, the audit identified more than 20,000 incarcerated individuals who were beneficiaries of what appear to be improper payments. Boxer’s office said it will follow up to ensure that the misspent funds are recovered and each of the audit’s recommendations to improve oversight measures is implemented.

The agencies identified by the Comptroller’s office responded by saying they are working to put various information systems in place to cross check data in order to prevent future fraud or misspending.

Comptroller finds $23M spent improperly on inmates in prison